Net Neutrality: The argument continues

The interview was published by Forbes India magazine on April 29, 2015. Pranesh Prakash gave his inputs.

The debate on net neutrality in India is playing out on the internet, social media, television and newspapers. On one side, there are telecom service providers who believe in services such as zero rating and sponsor-enabled free access to the internet for consumers; on the other, there are proponents of free and fair access to the internet who consider variable access as a violation of the principles of net neutrality.

The Telecom Regulatory Authority of India (Trai) has launched a consultation paper, inviting views from the public to analyse the implications of the growth of internet services, apps, over-the-top services (OTTs) and consider changes required in the current regulatory framework.

To get both sides of the argument, Forbes India spoke to Rajan Mathews, director general at the Cellular Operators Association of India, and Pranesh Prakash, policy director at The Centre for Internet & Society (CIS), a Bangalore-based, non-profit, research and policy advocacy.

Q. How are zero rating and net neutrality linked? And if they are separate issues, what differentiates them?
Rajan Mathews: Zero rating and net neutrality are two separate issues. Net neutrality is about not denying access, and about the absence of unreasonable differentiation on the part of network operators in transmitting internet traffic. Zero rating is when operators subsidise tariffs as a result of commercial arrangements with application providers who do not discriminate against the customer, but provide a benefit. Zero rating is not a net neutrality issue since access to all content and applications remains open. Such arrangements increase social welfare by transferring the cost of internet access from consumers to content providers. If a content provider deems its revenues to be substantial and wishes to engage in distribution arrangements with last-mile access providers to subsidise access to its services, it should be allowed to do so. Zero rating should be the customer’s choice.

Pranesh Prakash: The issues of net neutrality and zero rating are intrinsically linked. Zero rating is the practice of not counting certain traffic towards a subscriber’s regular internet usage. The motivations for zero rating are many. Unbundling is one. For example, a consumer wishes to use a WhatsApp pack as opposed to accessing WhatsApp through the regular internet pack. Self-interest is another: Showcase the internet’s value through cheap or free packs of certain internet services so that customers graduate to higher data packages.

All forms of zero rating—zero-priced, fixed-priced, subscriber-paid or internet service provider (ISP)-paid, content-based or content provider-based—have one thing in common: They are instances of discrimination on the network. This links it to net neutrality, which, at its core, is a question about discrimination by ISPs.

We shouldn’t only be focussed on the existing models of zero rating while regulating it, but also on the models that may emerge in the future.

Q. Zero rating is seen as an attempt to give internet access to millions of Indians who can’t afford an internet connection. Is there a different, but net-neutral, way to do this?
Mathews: Zero rating is [offered] in the nature of a subsidy, which is prevalent and practiced in all forms of businesses. For example, MS Office is available at different rates to different consumers such as homes and businesses, students and enterprises. It is for the consumer to choose which version to buy. The same should be applicable to telecom services as well.

Prakash: Just because something provides access to the bottom of the pyramid doesn’t make it something we should have. For example, predatory pricing is something that might benefit all subscribers in the short term but, over time, it harms the market, competition and consumers. Suppose all ISPs are mandated to provide internet for free to everyone; in the short run, everyone will get free internet but it’s not a sustainable business practice for ISPs.  If free internet can be sustainably provided, that’s not harmful. The current debate is to evaluate if we can ensure a method where we can have competition while providing access to the bottom of the pyramid.